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Portland Building audit sparks denials

Mayor and chief administrative officer push back against critical findings on renovation project

Reconstruction of the Portland Building is over budget and not complying with equity goals set by the City Council, according to an interim audit of the project released by the city auditor's office Wednesday, June 12.

Mayor Ted Wheeler and Chief Administrative Office Tom Rinehart dispute those findings in a unusually strong response to the audit.

According to the audit, the project is estimated to cost $214 million to complete, not the $195 million limit approved by the council. Additional costs will pay for furnishings, technology equipment and tenant improvements necessary to complete the project, according to the audit.

"While the public narrative about the Portland Building focused on activities tied to the $195 million budget, this does not include components critical to delivering a functional building," city auditors wrote in the report

In their response, Wheeler and Rinehart insisted the furnishings, technology equipment and tenant improvements were never included in the original $195 million budget, and that the council was briefed on all of them. "The project has been transparent about additional initiatives proposed outside of the construction budget and the return on investment for each of them," Wheeler and Rinehart wrote.

Auditors also reported that the city had not yet spent the 1% of construction costs set aside for community benefit grants, even though grant applications have been received. "No funds were spent in support of disadvantaged workers and businesses. There has been no report to Council about the status of these activities or results since 2016," according to the audit.

But Wheeler and Rinehart replied that the funds would soon be spent by Prosper Portland, formerly known as the Portland Development Commission, through a process known to the council. "In short, the opportunity, though delayed, will be realized," they wrote in their response.

Committee 'fully briefed'

In addition, the audit reported that the Portland Building Community Oversight Committee appointed to keep track of the project had not been able to fully track the spending.

"Over the years, the project team has been transparent about each individual budget request, but there has been no presentation of the collective Portland Building costs that result from these piecemeal decisions. As a result, budgets the project team presented to council and the Portland Building Community Oversight Committee did not include the entire work managed by the city or its contractors," according to the audit.

Wheeler and Rinehart included in their response a link to a May 15 letter from the committee praising the project staff. "Rest assured, our committee (and we understand with the council's blessing and actual votes) has been fully briefed on each of these matters prior to a decision being made," according to the letter signed by the five committee members.

Wheeler oversees the Office of Management and Finance, headed by Rinehart, and is in charge of the project. Although all audits include responses from those in charge of the bureau of project being audited, it is unusual for them to push back so hard. Most admit the shortcomings identified in the audits and say work is already underway to resolve them. But Wheeler and Rinehart appear to be flatly disputing many of the audit's findings, and they are not promising to do anything different in the future.

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